How to Negotiate a Year-End Raise

When Stuart Diamond worked as a reporter at The New York Times in the 1980s, he used to approach his boss toward the end of every year and pose a general query about how the boss thought he had been doing. Then after getting a favorable response, he would ask a straightforward question: “Am I worth less to you now than I was worth last year?” The editor would invariably say no, and Diamond would introduce the fact that the consumer price index, the government’s inflation measure, had risen, say, 3%, causing Diamond’s compensation to be worth that much less. “If no one in the company was getting a raise at the time, I would say, ‘I just want to get paid next year, what I was getting paid this year,’” he explains. Diamond says he used the tactic when he was a reporter at Newsday in the 1970s and early ‘80s, and he still uses it today with his superiors at Wharton Business School and Penn Law School, where he teaches negotiation strategy. “It’s never not worked,” he maintains.

More than two decades ago, Diamond left journalism to teach and consult on negotiation strategy. His best-selling book, Getting More: How to Negotiate to Achieve Your Goals in the Real World, lays out his unique take on negotiating in a range of situations, from convincing a four-year-old to brush his teeth and go to bed on time, to an Indian woman talking her way out of an arranged marriage. Diamond has advised government and corporate managers in more than 40 countries. His clients have included a Chinese petrochemical company, South African entrepreneurs, Citibank, Eli Lilly and Google. The book is packed with negotiation tips for all sorts of situations, from sales to relationships to travel to military stand-offs.

Diamond’s theme: it’s easier to get people to agree with you if you demonstrate that you value their perceptions and emotions, rather than trying to use power and logic to persuade them. I asked Diamond to apply his ideas to the challenge of negotiating a year-end raise or bonus. He offers the following advice:

First, always negotiate in person, rather than via phone or email. Diamond says studies show that face to face meetings are six times more likely to go the negotiator’s way. “When you look in someone’s eyes, it’s harder to say no,” he notes. Rather than framing the meeting as a salary negotiation, tell your boss you’d like to have a broad discussion about your value to the company, with a focus on your compensation, taking into account the company’s constraints.

Second, inquire about your manager’s perceptions of you. Ask how you performed this year; did you do as well as expected? Do ask if the manager has any written evaluations about you. Also ask, what are the company’s standards for giving out raises?

Next, if the boss says the company is awarding no raises this year, ask, “What do I need to do in the next year to get a raise?” Arrive prepared with documentation of your achievements over the past year in the form of a memo, advises Diamond. Do keep records every time a colleague or superior compliments your work. If you’ve gotten a stellar review from another superior, you can use the documentation to negotiate for a raise. But Diamond says it’s better to use your past accomplishments to bolster your argument that you can be a high achiever going forward.

At the Times, Diamond says he counted his stories that landed on the front page, and kept a file of compliments from his superiors. He compared his output with colleagues and played up the fact that he would produce the same or greater quality of work the next year.

Do volunteer to work extra shifts or to put in time during off hours. Diamond says he discovered that the Times was short-staffed on weekends, so he said he would come in on Sundays. There was always plenty of work and the Sunday shifts yielded material for additional page one stories. Diamond also advises volunteering to switch departments if your company can use your services elsewhere.

If you find the manager is open to discussing a raise, Diamond suggests letting them take the lead on setting a number. “You want to give the boss the decision-making power up front,” he says. “It makes the boss feel empowered.” Diamond recommends another negotiation subtlety: Don’t say you deserve a raise. Rather, suggest that a raise is only fair. “You want them to come to the realization themselves that you deserve a raise,” Diamond says. “You want to lead them by giving them the information they need to justify the decision.”

Once the manager starts talking about a number, Diamond recommends asking how they arrived at the figure, and what you need to do to earn more than that. “You want them to set the standards,” he explains. “The more they set the standards, the more they’re committed to them.”

If your manager maintains adamantly that no one in the company is getting a raise, including you, Diamond advises raising the subject of “intangibles” like added vacation, flexible work time and expenses that come from “buckets” other than compensation. Maybe your employer can give you more paid days off. Perhaps you can get a car allowance, help underwriting a home loan, or your employer will agree to pay for continuing education courses.

Another tip: Diamond recommends bonding with a long-time company employee and asking that source for information. “There’s always some old guy in an office who has been put out to pasture,” he says. “No one talks to him but this person will know about the company’s dreams and fears and how to get raises.”

If your boss winds up offering nothing, ask when you can have the conversation again. Suggest the end of the next quarter or after six months. Also ask what has to happen, at the company or in the economy, in order for you to be considered for a raise. “You always want to leave the door open,” says Diamond.

What about timing for the end-of-year raise discussion? Diamond recommends Thanksgiving week, when the pace slows in many workplaces. “You can say, ‘I’m really thankful for my job. I’d like to get an evaluation of how I did this year,’” Diamond suggests.